Aviation Finance

Aviation Finance Vol. 15 No 15, July 24th 2025. ISSN 2009-7859

Taxation

Navigating the 2025 tariff landscape: considerations for aviation lessors

Aviation leasing / financing has always been dependent on cross-border flows of aircraft assets and capital. Geopolitical tensions and evolving trade dynamics have escalated this year and continue to impact practically on the sector. In particular, tariff escalations in the US, China and (potentially) the EU adds complexity to long term investment decisions for aircraft lessors, operators and investors. Ciaran Conroy, EY Partner and member of EY's Aviation Finance Team writes on the topic in the midst of the currently fluid and changeable tariffs environment. What is the current state of play and how should aircraft lessors be thinking about this now? he asks.

Aircraft Leasing

Avolon order for 90 Airbus aircraft brings the lessor's Airbus commitments to 413 aircraft as it reports robust Q2 earnings

The order (75 Airbus A321neos, and 15 A330neos) increases Avolon’s Airbus commitments to 413 aircraft, comprising exclusively of A320neo family and A330neo aircraft. The order includes purchase rights in respect of a further 40 Airbus aircraft, 25 A321neos, and options to purchase a further 15 A330neos. Avolon separately reported today that its Q2 net income was up by 38% on the same period last year, to $143m from $105m in Q2 2024.

Public Markets: Aviation Assets

The evidence from the aviation markets - long term trends are still in play

The evidence from Aviation Finance trackers still point to the long run persistence of some modular trends in aviation finance - such as the continuing competivity of the commercial airline business, the possibility of sustained profitability of consistent winners in that sector, such as Ryanair, the effects of geopolitical uncertainty, and the continued long run robustness of the aircraft leasing model.

  
In this issue

In this issue

In this issue we address some of the big uncertainties besetting aviation, and indeed the entire global economy as we continue to report a sector in rude good health, to quote one of our contributors, Joe Gill, who also comments on the continuing buoyancy in aircraft leasing. In the midst of the positive outlook and activity in most aviation markets around the globe the uncertainty over tariffs is at a height this summer - and this is exacerbated by the fact that the 'trade war' is being conducted mainly on a country-by-country basis rather than by sector, as was the case 100 years ago.

Jurisdictions: Ireland

Mid year report: global demand for air travel is still set to grow by over 6% over 2024, and demand for leased aircraft is in rude good health

As we pass the first half of 2025 some certainties are evident for the full year; (1) global demand for air travel will grow again and is set to rise by about 6% over 2024; (2) monthly output of short-haul commercial aircraft will rise by year end with Boeing alone aiming to lift 737 production from 38 to 42 by year end; (3) jet fuel prices, a key cost for airlines, are declining by about 13% year on year and (4) demand for leased aircraft is in rude good health. All of these trends bode well for the aviation eco-system in Ireland despite a turbulent geo-political backdrop.

Low Cost Airlines

Ryanair surges, as strong Q1 results see profits jumping 128% to €820m in the quarter

Ryanair reported strong first quarter results, with profit after tax soaring 128% to €820 million in the period. Revenues climbed 20% to €4.3bn. Europe's largest low-cost carrier said the strong results were driven by a 21% increase in average fares, and a 4% increase in passengers, reaching 58 million. Ryanair's CEO Michael O'Leary also issued a critique of the effectiveness of the EU's green agenda in the aviation space, and also renewed his long standing critique of Europe's ATC system.